ING offers stake in the Bourbon

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Many patrons of The Bourbon pub in Kings Cross, formerly the Bourbon and Beefsteak, no doubt have dreamed of owning shares in the establishment.

Well now they can, with ING Real Estate floating its new pub trust worth $70.5 million.

The ING Real Estate Entertainment Fund will have as its five main assets the Bourbon, The Commodore in North Sydney, the Woolwich Pier, the Five Dock Hotel and the Aussie Rules Club in Kings Cross.

It will join ING's office and industrial funds, which are all run by chief executive David Blight.

The new float is expected to be the launching pad for growth in this sector, which already returns a healthy 7 to 9 per cent, thanks to gaming revenue and the increased popularity of pubs.

Already Foster's has floated its pub property assets into Australian Hospitality & Leisure Group while private hotelier Bill Waugh has been looking at a public float of his pubs.

Under the ING plan, the fund will offer a forecast income return of 9.3 per cent in the first year, of which 45 per cent is estimated to be tax deferred.

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ING Real Estate Entertainment Fund will own the freehold of entertainment venues, hotels and bars throughout Australia and receive rental income from experienced hotel operators under long term leases. The average 14-year lease term, combined with annual fixed rent increases, provides investors with a secure and growing income.

The fund is seeking to raise $26 million from the initial public offering, with ING Real Estate subscribing for at least 5 per cent of the equity.

Hugh Thomson, chief operating officer of ING Real Estate, said the hotels were well located in prime entertainment precincts or in areas with limited existing competition.

"Four of the five hotels will be operated by the Icon Hospitality Group. Icon has a long and successful record of hotel management and ownership," Mr Thomson said.

"ING Real Estate intends to grow the fund with further acquisitions of hotels operated by both Icon and other operators," he said.